VZCZCXRO8024
OO RUEHCHI RUEHDT RUEHHM
DE RUEHML #1608/01 1370648
ZNR UUUUU ZZH
O 170648Z MAY 07
FM AMEMBASSY MANILA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 6527
INFO RUEHZS/ASSOCIATION OF SOUTHEAST ASIAN NATIONS IMMEDIATE
RUEHKO/AMEMBASSY TOKYO IMMEDIATE 3219
UNCLAS SECTION 01 OF 03 MANILA 001608
SIPDIS
SENSITIVE
SIPDIS
FOR EAP A/S HILL FROM AMBASSADOR
E.O. 12958: N/A
TAGS: PREL PHUM PTER ECON RP
SUBJECT: SCENESETTER FOR EAP ASSISTANT SECRETARY HILL
1. (SBU) Summary. A warm welcome again to the Philippines!
As you arrive, the Philippines will still be focused on
recent mid-term election for the Senate, House, and
provincial positions. Final national results will not be
available until as late as June 14. In the counter-terrorism
realm, the Armed Forces of the Philippines demonstrated
sustained, impressive combat prowess in ongoing operations
against Abu Sayyaf and Jemaah Islamiyah terrorists, and
remains fully committed to the Defense Reform and Battalion
Retraining Programs. The peace process throughout Mindanao,
as well as peace talks with the Moro Islamic Liberation
Front, are moving forward. The government has undertaken new
steps against unlawful killings, but violence and slow
justice remain of concern. The economy performed well in
2006, and the U.S. continues to be the Philippines' largest
trading partner, with over $16 billion in two-way merchandise
trade. The Philippines has played a welcome leadership role
within ASEAN on Burma, North Korea, and counterterrorism.
2. (U) While we know how busy you will be with the ASEAN
Regional Forum Senior Officials Meeting, we hope to set up a
working lunch with top officials handling Mindanao to provide
you first-hand insights, and also to arrange brief radio and
TV interviews to discuss U.S.-Philippine relations and ASEAN
issues. End Summary.
----------------------
2007 MIDTERM ELECTIONS
----------------------
3. (U) Philippine mid-term elections took place on May 14,
but final results will not be available for a few days, or at
the national level perhaps as late as June 14. With turnout
rates of about 75 percent, the enthusiasm of Philippine
voters was palpable, and the dedication of electoral workers
and more than one million volunteers was a tribute to the
determination of the Philippine people to ensure the freest
and fairest elections possible. However, election-related
violence left an estimated 126 dead, including police and
soldiers. There is widespread concern that cheating will
escalate during the canvassing process.
4. (SBU) U.S. interests remain focused on the success of
democratic processes. The outcome of the elections will not
in any meaningful way affect our close ties and cooperation
with the government, which will remain pro-American and
anti-terrorism. A top concern for the Arroyo Administration
is to ensure sufficient Congressional seats to block future
impeachment motions against President Gloria Macapagal
Arroyo, especially since opposition forces will likely
dominate the new Senate. President Arroyo's allies are
hoping election of new pro-Administration "party list"
representatives will not only help protect her against
impeachment but will also serve as leverage against possible
challenges within her coalition related to charter change
that could limit her powers or term of office.
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INCREASED COMBAT PROWESS AND COMMITMENT TO DEFENSE REFORM
--------------------------------------------- ------------
5. (SBU) With U.S. support, the Armed Forces of the
Philippines (AFP) has demonstrated sustained, impressive
combat prowess in its ongoing counterterrorism operations,
notably now on the southern island of Jolo. Improved
operational readiness rates for aircraft and vessels,
casualty treatment, night helicopter medical evacuations, and
tactical field skills are directly attributable to U.S.
training, advice, and assistance. Successful operations by
AFP troops -- including soldiers, Marines, airmen, and
sailors -- against Abu Sayyaf and Jemaah Islamiyah terrorists
since August 1, 2006 led to the deaths in military operations
of Khadaffy Janjalani and Abu Solaiman, the top two leaders
of the Abu Sayyaf Group, and kept Jemaah Islamiyah terrorists
on the run. We plan to pay out US$10 million from the
Rewards for Justice program in early June.
6. (SBU) The Philippine Defense Reform Program is
transforming the Philippine military into a more transparent,
accountable, and effective institution. This U.S.-supported
effort aims at a complete restructuring of the military
establishment ranging from personnel management and logistics
to acquisition and training. With the advice of the Joint
U.S. Military Assistance Group and a 13-member team of U.S.
experts, the AFP and Department of National Defense have
already registered significant gains. U.S. Special Force
troops are helping jump-start the newly begun Battalion
Retraining Program, which will retrain all 72 Army and 12
Marine battalions.
MANILA 00001608 002 OF 003
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MILF PEACE PROCESS
------------------
7. (SBU) Exploratory talks between the Philippine Government
and the Moro Islamic Liberation Front (MILF) should resume
soon in Kuala Lumpur now that the May 14 midterm elections
are over. Territory for a prospective "Bangsamoro Juridical
Entity" remains the key issue in the negotiations. The MILF
appears to be more flexible regarding the territorial
boundaries of a new Muslim political entity. The
government's plan is for a transitional council -- including
the MILF, Moro National Liberation Front (MNLF), and Muslim
political leaders -- to take the place of 2008 elections in
the existing Autonomous Region in Muslim Mindanao and to
define Muslim self-determination in the next entity.
8. (SBU) The enabling legislation and plebiscite to create
this "Bangsamoro Juridical Entity" will hinge upon majority
support from the new Congress. Members of both peace panels
are concerned about potential "spoilers" -- powerful business
families, traditional politicians, extremist insurgent
commanders, and/or "hawkish" elements in the Philippine
military -- to a peace accord, and a likely
opposition-dominated new Senate will further complicate the
political game plan. We have intensified our dialogue with
all parties, and will soon increase our contacts with local
officials now that elections are over. Durable peace would
be good for the Philippines, and crucial to denying
terrorists' sanctuary.
---------------------------------------
URGING ACTION AGAINST UNLAWFUL KILLINGS
---------------------------------------
9. (SBU) We continue our strenuous efforts at all levels to
reign in unlawful killings of leftists, journalists, and more
mainstream politicians. We are concerned about such
killings, whoever is responsible, but particularly about
allegations that members of the security forces may be
responsible for some. I and the country team have discussed
this extensively with President Arroyo and her Cabinet, who
assure us of their commitment to bring those responsible to
justice. Unlawful killings, especially outside major cities,
is a historical problem in the Philippines related to a weak
judiciary. We take very seriously our vetting
responsibilities under the Leahy Amendment for all Philippine
security officials receiving USG-funded training.
10. (U) President Arroyo has taken several steps to address
this problem, including a police task force to investigate
the killings and to file charges, specially designated courts
to handle these cases, a rejuvenated Presidential Human
Rights Commission, a new Armed Forces Human Rights office to
investigate allegations, and additional funding for the
Commission on Human Rights. The Embassy in early May
organized a ground-breaking seminar that brought together
Philippine police and prosecutors to build patterns of
coordination in preparing successful cases and to provide
training by U.S. experts from the FBI, Department of Justice,
and the U.S. military. We have requested additional USG
funding for the Philippine Commission on Human Rights and
assistance by U.S. experts to the Armed Forces Human Rights
Office.
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ECONOMICS AND TRADE
-------------------
11. (U) The U.S. remains the Philippines largest trading
partner, with over US$16 billion in two-way merchandise
trade. Major U.S. exports include electronics and
agriculture. Texas Instruments recently announced its
decision to invest US$1 billion for the construction of new
facilities to produce microchips at the former Clark Airbase.
The U.S. is also the largest investor here, with over US$6
billion in assets. The large American Chamber of Commerce in
Manila is proud of its history as the first American Chamber
of Commerce abroad.
12. (U) The Philippine economy performed well in 2006.
Growth hit an estimated 5.5 percent, while inflation slowed
to only 4.7 percent. Both the stock market and the peso
ended the year at the highest levels in recent years. The
economy was bolstered by a 15 percent increase in remittances
by overseas workers, a recovery in exports, and sensible
fiscal policies, which have brought the budget deficit under
control. The Millennium Challenge Corporation administers a
MANILA 00001608 003 OF 003
US$21 million Threshold Program through USAID, focusing on
anti-corruption and revenue enhancement. The U.S. assists in
economic development, anti-corruption, environmental
protection, and poverty alleviation through our policy
advocacy and an active USAID, USDA, and Peace Corps presence
throughout the country.
----------------
ASEAN LEADERSHIP
----------------
13. (U) President Arroyo hosted a successful series of
ASEAN-related summits in January 2007, using her various
chairman's statements to articulate welcome forward-leaning
positions on Burma and North Korea. She also ensured the
adoption of a new ASEAN Convention on Counterterrorism that
will enhance -- or, in many cases, create -- new patterns of
regional cooperation against terrorist networks.
Visit Embassy Manila's Classified website:
http://www.state.sgov.gov/p/eap/manila/index. cfm
KENNEY